THE Chancellor announced yesterday that the North-East will be home to the country’s first and biggest freeport – but what is a freeport?
In his Budget yesterday, March 3, Rishi Sunak, gave the bid to set up the UK’s first and biggest freeport in Teesside the green light.
There will be eight Freeports in England, at East Midlands Airport, Felixstowe, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
Mr Sunak said the eight new freeports in eight English regions will “unlock billions of pounds of private sector investment generating trade and jobs up and down the country”.
What is a freeport?
Freeports, usually located around shipping ports or airports, are economic zones where goods aren’t subject to tariffs when they come from abroad.
Taxes, which go to the government, are only then paid if the goods leave the freeport and go to another part of the UK.
Are there any currently in the UK?
Between 1984 and 2012, there were seven freeports across the country but they were all closed. Mr Sunak hopes bringing them back will help regenerate deprived areas.
This is one freeport on the Isle of Man.
Why are they being brought back?
Mr Sunak said the “special economic zones with different rules to make it easier and cheaper to do business” would come with simpler planning, cheaper customs – with favourable tariffs, VAT or duties – and lower taxes, with “tax breaks to encourage construction, private investment and job creation”.
How will a freeport impact Teesside?
The Teesside Freeport will create, reportedly, 18,000 skilled, good-quality jobs within five years, boost the local economy by £3.4billion and support offshore wind, clean energy, chemicals and process, and advanced manufacturing sectors.
The bid, submitted to Government just a month ago by Tees Valley Mayor Ben Houchen, covers sites across the region, including Teesworks, Wilton International, Teesside International Airport, the Port of Middlesbrough, the Port of Hartlepool, Liberty Steel, LV Shipping and PD Ports.
It is also said to will increase inward investment into Teesside, Darlington and Hartlepool by over £1.4 billion.
What benefits do they have for companies?
Companies inside English sites will be offered tax breaks including no business rates for five years, no stamp duty, rebates for machinery investment and lower tariffs.
Firms will also benefit from a reduction of tax on existing properties and when building new ones, as well as a lower national insurance bill for new staff.
The devolved nations will set their own rules for their freeports.
Does everyone agree with freeports?
The low-tax zones are controversial. Supporters say freeports will help create jobs in industries like manufacturing and logistics, while those who oppose them say sites can become tax havens for businesses.
Owners and operators of Teesport, the fifth largest port complex in the UK and a key piece of national infrastructure, PD Ports, welcomed Mr Sunak’s announcement yesterday alongside regional politicians and other business leaders.